Earl Stewart is the owner and general manager of Earl Stewart Toyota in North Palm Beach. The dealership is located at 1215 N. Federal Highway in Lake Park. Contact him at www.earlstewarttoyota.com, call (561) 358-1474, fax (561) 658-0746 or email firstname.lastname@example.org.
I was surprised to read an article on the front page of today's New York Times, headlined, "More Retailers See Haggling as a Price of Doing Business."
The story goes on to say that many retailers who always sold their products and services at fixed prices, now are haggling with their customers. Some examples of companies going to haggling are Best Buy, Home Depot, Lowes, Nordstrom's and Bloomingdales!
Up until now, the only businesses that won't give you a firm price are car dealers. This is one of the biggest reasons that that the car buying experience is ranked as worse than that of buying any other product. You know what I'm talking about. If you ask most car dealers for a price, whether it's by phone, email, or in person, you can't get a firm price until you're willing to "sign on the dotted line." The car dealers won't give you their lowest price before you commit to buy because they don't want to allow you the privilege to shop and compare their price with their competition.
The car salesman tells you, "If you're going to shop for a lower price, go ahead, but then come back with your best price and I'll beat it." Of course, the car salesmen at the competing dealerships tell you the same thing and you're trapped in an endless loop! Finally, exhausted and frustrated, you succumb to the next car salesman you see, paying the higher price because nobody will give their best price unless you agree to buy right then.
The reason I was surprised to see stores like Bloomingdales and Best Buy regressing to haggling over prices is that I thought car dealers were simply an anachronism, having failed to "see the light" of modern marketing. Haggling was commonplace in the 19th and earlier parts of the 20th century. It's still common in third world countries. But, over the last century consumers have become for more educated, sophisticated and demanding.
As important as the evolution of the consumer has been the "explosion" of the internet. The brain of the consumer was exponentially augmented with the birth of the Internet in the latter half of the 20th century. With a few keystrokes, today's consumer can find the best price on virtually any product or service she wants to purchase. Not only can you find the best price but you can compare the quality and reliability of competing products and the integrity and reputation of those companies selling those products and services. It's been said that the sum total of human knowledge doubles every 10 years. But up until recently, that knowledge wasn't instantly available to us.
Today, you can "Google" anything you want to know within seconds or minutes.
This may explain why Home Depot, Nordstrom's, Bloomingdales, and other "modern" retailers are beginning to haggle. They know that you can walk into their stores, pick out a sink or a dress that you would like to buy, and find a lower price on your iPhone. Most of these stores don't advertise that they will do this, but if you ask to speak to a manager, they will reduce their price to meet or beat the lower price you found on Amazon.com or elsewhere.
The Internet is the greatest thing that's happened to the consumer in the history of the world. If you don't shop on the Internet for everything you wish to buy, you're "missing the boat."
Amazon.com is, by far, the leader in Internet general retailing and TrueCar.com is the leader in automobile internet retailing. This trend is growing very fast and I predict that in the not too distant future you will buy virtually all of your products and services on the internet.
Physical stores as we know them today will become showrooms because people still like to see, touch, smell and try out or "drive" a product before they buy it.
In my opinion, the stores like Bloomingdales that are "regressing" to haggling are making a huge mistake.
Over a year ago, I made the decision to give my customers the lowest price on all of my new and used cars rather than requiring them to negotiate to get the best price. In retrospect, it was one of the best marketing moves I ever made. My sales and profits are soaring. Even though my prices are lower now, my volume has more than offset the smaller profits I make on each car. The reason my volume is soaring is because most car buyers don't like to haggle. They consider it time consumer and demeaning. Today's sophisticated consumer doesn't have the time or the patience to "play the car dealers' games."
Other car dealers ask me, "But don't your customers take your best price and show it to your competitor to see if they can get a lower price?" I answer them, "Of course they do! This is the way products are supposed to be bought and sold." The consumer should be entitled to find the best price for everything they buy. Sometimes my price is not the lowest and the consumer buys from my competition. This is the way it's supposed to be in a free marketplace. I try to make sure my price is lower than my competition but it isn't always. But, I get to talk to a lot more potential buyers than my competitors.
The reason for this is that I'm the only car dealer in the market that will give prospective customers the lowest price on any car without a lot of time consuming haggling and game playing. A customer can get my lowest price by phone, email, text, or face to face.
I gain far more customers because of this than I lose because my competition offers a lower price. I also have customers who return and buy from me simply because they like the way I do business even though my price is a few dollars higher. This happens a lot when they find out that the price the other dealer offered that seemed lower really wasn't when they were surprised with extra charges like "dealer fees" and "dealer installed accessories."
So, my advice to Bloomingdales, Home Depot, Best Buy, and all of the other retailers that are regressing to haggling is DON'T DO IT! Show your customers the respect of giving them your lowest price and allowing them their right to shop and compare your price with your competition. Also, show your customers that you haven't told you will haggle, a little courtesy by not offering their more savvy friends and neighbors a lower price.